News & Insights

Fair Labor Standards ActApril 8, 2019by Stanton LawNavigating the FLSA Tip Credit: Part 3—Tipped Employees with Multiple Roles

by Amy Thomson.

Navigating the FLSA Tip Credit: Who and What Qualifies, Valid Tip Pools, and Other Things You Need to Know

Don’t miss our previous posts where we introduced the FLSA tip credit and discussed who qualifies as a tipped employee. We still have two more posts to round out this important topic. In this post, we go into more detail about tipped employees, particularly those who have more than one role with the same employer.

Employees With Multiple Roles

When employers use the same employees in tipped and non-tipped positions, the employer may only take the tip credit for:

  • Workers who qualify as tipped employees because they customarily and regularly receive more than $30 a month in tips for their work in the tipped occupation
  • The hours those employees spend working in their tipped occupation

Dual Jobs Versus Sidework

The law distinguishes tipped employees with dual jobs from tipped employees who simply have additional duties related to their tipped work but which don’t directly produce tips (also known as sidework). An example of an employee with dual jobs would be a hotel maintenance person who also works as a waiter in the hotel’s restaurant. The employer would not be able to take the tip credit for the employee’s maintenance duties (because they are unrelated to the tipped occupation). On the other hand, an example of an employee with a single job performing sidework would be a waiter who spends part of their time cleaning and setting tables, making coffee, and occasionally washing dishes or glasses.

Until recently, the DOL took the stance that if a tipped employee was spending more than 20% of their work week on sidework, then the employer could not take the tip credit for that work. However, in November 2018, the DOL issued an Opinion Letter (FLSA2018-27) that reversed their stance. The Opinion Letter states that the DOL does “not intend to place a limitation on the amount of duties related to a tip-producing occupation that may be performed, so long as they are performed contemporaneously with direct customer service duties and all other requirements of the [FLSA] are met.”

As guidance for employers, the DOL references the duties listed as core or supplemental for the appropriate tip-producing occupation in the Tasks section of the Details report in the Occupational Information Network (O*NET) as those “directly related to the tip-producing duties of that occupation… as long as they are performed contemporaneously with the duties involving direct service to customers or for a reasonable time immediately before or after performing such directservice duties.” Generally, employers may not take the tip credit for related duties that aren’t listed in the O*NET task list.

This does not mean that tipped employees may spend unlimited amounts of time performing sidework. Otherwise, if they do, this could arguably be considered performing dual jobs rather than a single tipped occupation. Please consult an experienced Georgia employment attorney for more details, especially if you’re unclear whether the duties performed by your tipped employees are considered sidework or whether the amount of sidework performed is excessive.

Contact A Georgia Employment Attorney With Your FLSA Questions

FLSA claims related to tips can be expensive, even if you didn’t intend to break the rules. Make sure your business is in compliance. Check with Amy Thomson, an experienced Atlanta employment law attorney at Stanton Law, at 404-531-2341.